August marked 1,400 new companies and 2,400 new entrepreneurs

The net increase of individual entrepreneurs has reached the highest number of the year. This August, 2,511 new companies and 4,881 new individual entrepreneurs have been established. On the other hand, 1,097 companies (COM) and more than 2,400 individual entrepreneurs (IE) have terminated their business activities. August marked 1,414 new companies and 2,400 new individual entrepreneurs in the Czech Republic. In the first eight months of 2017, 22,000 companies were established and 7,600 were terminated. At the same time, 40,500 natural persons began and 33,000 ceased their business activities. The figures are based on an analysis carried out by CRIF using the data on the www.informaceofirmach.cz server.

The number of terminated companies in August was the highest number within one month since the establishment of the Czech Republic. “While the interest in business activities in a company form is growing, the number of terminated companies is increasing as well. The ratio of established and terminated companies suggests that the number of companies is not increasing as fast as in previous years,” explains Věra Kameníčková, analyst for CRIF – Czech Credit Bureau while noting that thanks to the big increase of newly established companies, the August net increase of more than 1,400 companies was by far not the lowest one. On the contrary, the number of terminated business authorisations for natural persons in August was the second lowest this year and the total increase of over two thousand entrepreneurs was the highest in the last two years.

In the first eight months of 2017, 22,000 companies were established and 7,600 were terminated. The net increase amounted to almost 14,400 companies. At the same time, 40,500 natural persons began and 33,000 ceased their business activities. From January to August, there have been 7,800 new entrepreneurs, one thousand more than in the same period of 2016.

More than half of new entrepreneurs are young people under 30

The largest group of individual entrepreneurs starting their activities in 2017 are people in the age between 18 and 30, specifically, they represent more than 20,000 of the new individual entrepreneurs, i.e. more than half of all new entrepreneurs. A quarter of new entrepreneurs are people in the age between 31 and 40 (10,718). By contrast, the smallest group of new entrepreneurs are people over 61, amounting to less than 900 entrepreneurs beginning their activities in 2017. While the number of entrepreneurs over 40 has declined this year, the entrepreneurs under 30 have rapidly grown. In their case, 71 new business licenses fell on 10 terminated ones.

The interest in professional, scientific, and technical activities is growing

The first eight months of 2017 marked the highest number of established businesses in the trade sector (4,897) and in the professional, scientific, and technical sector (4,825). However, when it comes to a net increase, the order is reversed. The highest number of companies was established in the professional, scientific, and technical sector, namely 4,050. This is followed by the trade sector with 2,691 new companies. While the trade sector also marked the highest number of terminated companies (2,691). The second highest number of terminated companies (1,495) was registered in the real estate sector. “In recent years, we detect an increasing business interest in sectors requiring a high level of education and expertise. Recently, it represents a highly dynamic and developing sector of the Czech economy,” says Věra Kameníčková.

Among the natural persons, the biggest interest was again registered in the trade sector with more than 10,500 entrepreneurs. Nearly 6,000 natural persons started their business in professional, scientific, and technical activities. Similarly to companies, this sector marked the biggest increase of entrepreneurs, more than 2,500. Followed by the manufacturing industry (1,127) and then trade (1,060) which again recorded by far the highest number of terminated business authorisations (9,500). Remotely followed by the construction industry (4,700 terminated businesses) and manufacturing industry (3,800).

In the last eight months of 2017, the majority of companies was established in Prague (9,635), in the South Moravian Region (2,833) and the Moravian-Silesian Region (1,799). The Karlovy Vary Region saw the lowest number of established companies, namely 315. The highest number of terminated companies was also in Prague (3,904) and remotely followed by the South Moravian Region (902). The lowest number of terminated companies was in the Karlovy Vary Region (100), the Pardubice Region (109), and the Liberec Region (128).

Similarly, the highest number of new entrepreneurs in this period was in Prague (6,437), the Central Bohemian Region (5,261), and the South Moravian and Moravian-Silesian Regions where there were more than 4,000 new entrepreneurs. The lowest number of new entrepreneurs was again in the Karlovy Vary Region (930), then in the Liberec Region (1,617), and the Pardubice Region (1,810). In the last eight months, nearly 4,300 natural persons terminated their business activities in the Central Bohemian Region, 4,000 in the Moravian-Silesian Region, and 3,700 in Prague. Prague (2,738) and the Central Bohemian Region (988) marked the highest increase of entrepreneurs. In the Karlovy Vary Region the number of entrepreneurs decreased by 285 and in the Ústí Region by 39.